OPERATIONAL EQUIVALENCE REPORT FOR THE JUNE QUARTER

OPERATIONAL EQUIVALENCE REPORT FOR THE JUNE QUARTER 31 August 2012 FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 1/18

Contents 1. Executive summary 3 2. Introduction 6 2.1. The interim equivalence and transparency measures in the SSU 6 2.2. Purpose of the Operational Equivalence Report 7 2.3. Contents of the Operational Equivalence Report 7 2.4. Description of the equivalence and transparency metrics in the SSU 7 3. Equivalence and transparency measures and service levels 8 3.1. Service levels 8 3.2. Approach to calculating results 12 4. Results for the June 2012 quarter 13 Glossary and Acronyms 18 FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 2/18

1. Executive summary This Operational Equivalence Report has been prepared under clause 16.2 of the SSU and sets out the quarterly results of Telstra s performance against the equivalence and transparency metrics in Schedule 3 of the SSU. In total, there are 21 metrics reported upon in this document. The first 18 metrics relate to the operational quality and delivery standard of relevant Regulated Services, being: Basic Telephone Service (metrics 1-7); Wholesale ADSL Layer 2 Service (metrics 8-11); Line Sharing Service (metrics 12-13); Unconditioned Local Loop Service (metrics 14-16); and Domestic Transmission Capacity Service (metrics 17-18). The other 3 metrics relate to: billing timeliness (metric 19); access to Telstra Exchange Building Facilities (metric 20); and wholesale systems availability (metric 21). Metrics 1-11 and 17-19 compare Telstra s performance in relation to services delivered to Wholesale Customers with its performance in relation to services delivered to Retail Business Units. The remaining metrics (ie, metrics 12-16 and 20-21) are measures for wholesale service delivery only. These metrics measure Telstra s performance in relation to Wholesasle Customers against specified service targets. Metrics 1-12 are reported for business and residential end-customers separately. Tables 1.1 to 1.5 below summarise the results for the June 2012 quarter. In calculating these results, Telstra is entitled to apply certain conditions set out in clause 10 of Schedule 3 of the SSU (the Conditions). The only condition that Telstra has applied in the June quarter relates to Mass Service Disruptions (MSDs). Telstra believes that it is reasonable for its performance over the June quarter to exclude MSDs as, by their very nature, MSDs prevent Telstra from provisioning services and rectifying faults, and impact wholesale and retail customers within the geographic area in which the MSD is applied. As required under clause 16.2(a)(ii) of the SSU, Telstra has also calculated the results that would have been achieved for each metric if the Conditions were not applied. These results are set out in section 4 below. The metrics reported in Table 1.1, Table 1.2 and Table 1.3 below compare Telstra s performance in relation to services delivered to Wholesale Customers with its performance in relation to services delivered to Retail Business Units. For each of these metrics, a postitive result indicates that Telstra s performance in relation to services delivered to Wholesale Customers exceeds its performance in relation to Retail Business Units. A result of 0 indicates that the performance for Wholesale Customers equals the performance for Retail Business units. A negative result indicates that the performance for Retail Business Units exceeds the performance for Wholesale Customers. FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 3/18

Table 1.1: June 2012 quarter results for metrics comparing performance in relation to Wholesale customers and Retail Business Units by end-customer type Business Variance Residential Variance Metric 1 Basic Telephone Service Metric 2 Basic Telephone Service Metric 3 Basic Telephone Service Metric 4 Basic Telephone Service Metric 5 Basic Telephone Service Metric 6 Basic Telephone Service Metric 7 Basic Telephone Service Metric 8 Wholesale ADSL Layer 2 Service Metric 9 Wholesale ADSL Layer 2 Service Metric 10 Wholesale ADSL Layer 2 Service The percentage of Basic Telephone Service customer installation orders provisioned in the relevant Quarter on or by the Service Level previous service available for automatic connection (i.e. an In-place Connection) The percentage of Basic Telephone Service customer installation orders provisioned in the relevant Quarter on or by the Service Level new service with available cabling and capacity where pre-provisioning work is not required The percentage of Basic Telephone Service orders provisioned in the relevant Quarter, on or by the Service Level new service which requires additional cable or network capacity The percentage of Basic Telephone Service order appointments that are met in the relevant Quarter The percentage of Basic Telephone Service Faults that are rectified in the relevant Quarter, and copied to Telstra s data warehouse by the relevant data extraction date, on or by the Service Level The percentage of Basic Telephone Service Fault appointments that are met in the relevant Quarter The percentage difference in non-recurring Fault ratio The percentage of services provisioned within Service Level where the customer or end-user has an existing and functioning basic telephone service capable of supporting ADSL services The percentage of services provisioned within Service Level held orders The percentage of Faults rectified within Service Level 6.04% 4.74% 8.80% 6.92% 13.51% 15.28% 0.90% 2.62% -5.89% -4.36% -0.45% 0.15% 0.07% -0.89% 0.82% 0.61% -4.84% -0.44% 1.37% 0.38% Metric 11 Wholesale ADSL Layer 2 Service The percentage of appointments kept -0.40% 0.03% Table 1.2: June 2012 quarter results for metrics comparing Wholesale and Retail performance Business Variance Metric 17 Domestic Transmission Capacity Service Metric 18 Domestic Transmission Capacity Service The perecentage of Domestic Transmission Capacity Service orders provisioned on or by the Service Level The percentage of Faults rectified within Service Level -5.14% -0.84% FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 4/18

Table 1.3: June 2012 quarter results for metrics comparing Wholesale and Retail performance (combined results for business and residential end-customers) Combined Business and Residential Variance Metric 19 Billing Timeliness Billing Timeliness Current charges generated in Telstra s systems presented on bill. 0.47% Table 1.4 and Table 1.5 show Telstra s performance in relation to the delivery of services to Wholesale Customers against the service targets specified in the SSU. Table 1.4: June 2012 quarter results for metrics comparing Telstra s performance against specified service targets by end-customer type Business Variance Residential Variance Metric 12 Line Sharing Service The perecentage of LSS completed within Service Level 9.02% 9.22% Table 1.5: June 2012 quarter results for metrics comparing performance against specified service targets (combined results for business and residential end-customers) Combined Business and Residential Variance Metric 13 Line Sharing Service Metric 14 Unconditioned Local Loop Service Metric 15 Unconditioned Local Loop Service Metric 16 Unconditioned Local Loop Service Metric 20 Access to Telstra Exchange Building Facilities The percentage of Faults rectified within Service Level The percentage of ULL Individual Cutovers completed on the Customer Requested Date The percentage of appointments for ULL Individual Cutovers offered according to the Servicce level where there is an Intact metallic path at the relevant premises The percentage of Faults rectified within the Service Level The perecentage of Joint Completion Inspections (JCIs) completed on the Telstra Committed Date (TCD) 1.77% -1.77% 2.98% -14.32% 100% Metric 21 Wholesale systems availability Availability of LOLO 99% FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 5/18

2. Introduction This Operational Equivalence Report sets out the quarterly results of Telstra s performance against the equivalence and transparency metrics in Schedule 3 of the SSU. The results may be useful in assessing Telstra s compliance with the Interim Equivalence and Transparency (IET) arrangements in Part D of the SSU. Most of the metrics are designed to compare Telstra s performance in relation to services delivered to Wholesale Customers with its performance in relation to services delivered to Retail Business Units. The other metrics compare Telstra s performance in supplying services to Wholesale Customers against specific service targets. To the extent that the results compare favourably, it indicates that the standard of service delivery that Telstra is supplying to wholesale customers meets or exceeds the IET arrangements in the SSU. 2.1. The interim equivalence and transparency measures in the SSU On 20 June 2010, Telstra entered into a Financial Heads of Agreement with NBN Co for the roll-out of the NBN and the migration of customers from the legacy copper network to the new fibre network. As part of the migration process, Telstra agreed to structurally separate. The legislative framework for Telstra s structural separation is set out in Division 2 of Part 33 of the Telecommunications Act 1997 (Cth) (Telecommunications Act). Under s 577A of the Telecommunications Act, the ACCC may accept a written undertaking from Telstra providing for its structural separation on the Designated Day. 1 The ACCC must not accept an undertaking given by Telstra unless it is satisfied that it provides, in an appropriate and effective manner, for transparency and equivalence in relation to Telstra s supply of regulated services to its in the period before the Designated Day. 2 On 29 July 2011, Telstra submitted a SSU to the ACCC for approval under s 577A of the Telecommunications Act. Following extensive consultations with the ACCC and other interested parties, including industry participants, Telstra made a series of amendments to the SSU. The amended SSU (version dated 23 February 2012) was approved by the ACCC on 27 February 2012, and came into force on 6 March 2012. A copy of the approved SSU is available at http://www.telstrawholesale.com.au/about/structural-separation-undertaking/index.htm#tab-2. The SSU commits Telstra to structural separation by the Designated Day and requires it to comply with detailed IET measures when supplying Regulated Services in the period before the Designated Day. Upon commencement of the SSU, these IET measures replaced the Operational Separation regime that had previously been imposed on Telstra as a statutory condition of Telstra s carrier licence. 3 Under clause 16.2 of the SSU, Telstra is required to prepare, and provide to the ACCC and the ITA Adjudicator, an Operational Equivalence Report outlining its performance against 21 equivalence and transparency metrics. The report must be produced quarterly, for each 3 month period starting from 1 January, 1 April, 1 July and 1 October each year (with the first report due for the quarter commencing 1 April 2012). 1 Section 577A(10) of the Telecommunications Act 1997 (Cth) defines the Designated Day as 1 July 2018 or, if the Minister, by written instrument, specifies another day, that day. 2 Section 577A(3), Telecommunications Act 1997 (Cth). 3 The Operational Separation regime was implemented under Part 8 of Schedule 1 of the Telecommunications Act 1997 (Cth). Under clause 65 of Schedule 1 of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010 (Cth), Part 8 of Schedule 1 of the Telecommunications Act 1997 (Cth) was automatically repealed immediately after an undertaking comes into force under s 577A of the Telecommunications Act 1997 (Cth). FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 6/18

2.2. Purpose of the Operational Equivalence Report This Operational Equivalence Report is published to provide information to the public, the industry, the ACCC and the ITA Adjudicator about measures of Telstra s performance in meeting the IET requirements in Part D of the SSU. 2.3. Contents of the Operational Equivalence Report This Operational Equivalence Report contains the following sections: Section 3 contains the performance standards for each metric as published in the SSU; and Section 4 details the results for this quarter, where the Conditions set out in clause 10 of Schedule 3 of the SSU have been applied (if any), and provides details of the results that would have been achieved for each metric if those Conditions were not applied. 2.4. Description of the equivalence and transparency metrics in the SSU Twenty-one metrics are reported upon in this document. The first 18 metrics relate to the operational quality and delivery standard of relevant Regulated Services, being: Basic Telephone Service (metrics 1-7); Wholesale ADSL Layer 2 Service (metrics 8-11); Line Sharing Service (metrics 12-13); Unconditioned Local Loop Service (metrics 14-16); and Domestic Transmission Capacity Service (metrics 17-18). The other 3 metrics relate to: billing timeliness (metric 19); access to Telstra Exchange Building Facilities (metric 20); and wholesale systems availability (metric 21). Metrics 1-11 and 17-19 compare Telstra s performance in relation to services delivered to Wholesale Customers with its performance in relation to services delivered to Retail Business Units. For these metrics, a positive result indicates that Telstra s performance in relation to services delivered to Wholesale Customers exceeds its performance in relation to services delivered to Retail Business Units. A result of 0 indicates that the performance for Wholesale Customers is the same as the performance for Retail Business Units. A negative result indicates that the performance for retail exceeds the performance for Wholesale Customers. Metrics 12-16 and 20-21 are measures for wholesale service delivery only. For these metrics, Telstra reports on the variance between its actual performance and the service targets specified in the SSU. Metrics 1-12 are reported separately for business and residential end-customers. Further information on the metrics is provided in section 3 below. FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 7/18

3. Equivalence and transparency measures and service levels 3.1. Service levels The following table contains the service levels for each equivalence and transparency metric as set out in the SSU. Table 3.1: Basic Telephone Service Equivalence and Transparency Metrics Metric Service Level # (where applicable) 1. The percentage of Basic Telephone Service customer installation orders provisioned in the relevant Quarter on or by the Service Level previous service available for automatic connection (i.e. an In-place Connection) 2. The percentage of Basic Telephone Service customer installation orders provisioned in the relevant Quarter on or by the Service Level new service with available cabling and capacity where preprovisioning work is not required 3. The percentage of Basic Telephone Service orders provisioned in the relevant Quarter, on or by the Service Level new service which requires additional cable or network capacity 4. The percentage of Basic Telephone Service order appointments that are met in the relevant Quarter 5. The percentage of Basic Telephone Service Faults that are rectified in the relevant Quarter, and copied to Telstra s data warehouse by the relevant data extraction date, on or by the Service Level 6. The percentage of Basic Telephone Service Fault appointments that are met in the relevant Quarter Urban 2 Clear Working Days Major Rural 2 Clear Working Days Minor Rural 2 Clear Working Days Remote 2 Clear Working Days, each from the relevant order date^* Urban 5 Clear Working Days Major Rural 10 Clear Working Days Minor Rural 10 Clear Working Days Remote 15 Clear Working Day, each from the relevant order date^* Urban 20 Clear Working Days Major Rural 20 Clear Working Days Minor Rural 20 Clear Working Days Remote 20 Clear Working Days, each from the relevant order date^* All locations appointments between two particular times less than or equal to a 4 hour period must be at the customer s premises no later than 15 minutes after the end time of the appointment Urban / Major Rural appointment window between to particular times greater than a 4 hour period but less than or equal to a 5 hour period must be at the customer s premises no later than the end time of the appointment Minor Rural / Remote appointment window between two particular times greater than a 4 hour period but less than or qual to a 5 hour period and the technician is required to travel a long distance must be at the customer s premises no later than 45 minutes after the end time of the appointment Note Response time is the end time of the calculation. It represents the time that the technician arrived for the appointment and is dependent on Telstra workforce or contractors making a record of their arrival time Urban 1 Clear Working Day after the Fault report is logged by Telstra^* + Major Rural / Minor Rural 2 Clear Working Days after the Fault report is logged by Telstra^* + Remote 3 Clear Working Days after the Fault report is logged by Telstra^* + All locations appointments between two particular times less than or equal to a 4 hour period must be at the customer s premises no later than 15 minutes after the end time of the appointment Urban / Major Rural appointment window between two particular times greater than a 4 hour period but less than or FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 8/18

# Metric Service Level # (where applicable) equal to a 5 hour period must be at the customer s premises no later than the end time of the appointment Minor Rural / Remote - appointment between two particular times greater than a 4 hour period but less than or equal to a 5 hour period and the technician is required to travel a long distance - must be at the customer s premises no later than 45 minutes after the end time of the appointment Note Response time is the end time of the calculation. It represents the time that the technician arrived for the appointment and is dependent on Telstra workforce or contractors making a record of their arrival time 7. The percentage difference in non-recurring Fault ratio Percentage of basic telephone service Faults that are not rereported within 60 calendar days Interim Orders and Withdrawn Orders are excluded. ^ d from the date which Telstra receives a correct and valid application from the customer to the date recorded in Telstra s relevant provisioning system as the date when all of the relevant stages for that service through which an order can pass are completed or the clearance date if there was a Fault on the connected service. * Where CRD or RCD is longer than the Service Level, then the CRD or RCRD will be the Service Level (or Telstra commitment date). + Metric does not apply where a site visit to the customer s premises is required to determine whether a Fault is the cause of the service difficulty. Table 3.2: Wholesale ADSL Layer 2 Service Equivalence and Transparency Metrics Metric Service Level (where applicable) 8. The percentage of services provisioned within Service Level where the customer or end-user has an existing and functioning basic telephone service capable of supporting ADSL services 9. The percentage of services provisioned within Service Level held orders 10. The percentage of Faults rectified within Service Level 3 Clear Working Days from date entered into Telstra s provisioning system # 20 Clear Working Days from date entered into Telstra s provisioning system # Urban by the end of the first Clear Working Day after the Fault report is logged by Telstra^* Major Rural and Minor Rural by the end of 2 Clear Working Days after the Fault report is logged by Telstra^* Remote by the end of 3 Clear Working Days after the Fault report is logged by Telstra^* 11. The percentage of appointments kept Appointment between two particular times less than or equal to a 4 hour period - must be at the customer s premises no later than 15 minutes after the end time of the appointment Appointment window between two particular times greater than a 4 hour period but less than or equal to a 5 hour period - must be at the customer s premises no later than the end time of the appointment Appointment window between two particular times greater than a 4 hour period but less than or equal to a 5 hour period and the technician is required to travel a long distance - must be at the customer s premises no later than 45 minutes after the end time of the appointment Note Response time is the end time of the calculation. It represents the time that the technician arrived for the appointment and is dependent on Telstra workforce and contractors making a record of their arrival time # ^ Where CRD or RCRD is longer than the Service Level, then the CRD or RCRD will be the Service Level (or Telstra commitment date). d from the date the Fault call is received to the earlier of: FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 9/18

* (A) the date and time that the tester enters an actual restore against the order; or (B) the date and time the field technician enters as the restore time. Metric does not apply where a site visit to the customer s premises is required to determine whether a Fault is the cause of the service difficulty. Table 3.3: Line Sharing Service Equivalence and Transparency Metrics Metric Service Level (where applicable) 12. The perecentage of LSS completed within Service Level 13. The percentage of Faults rectified within Service Level 3 Clear Working Days #^* Urban By the end of the first Clear Work after the Fault report is logged by Telstra +> Major Rural / Minor Rural by the end of 2 Clear Working Days after the Fault report is logged by Telstra +> Remote By the end of 3 Clear Working Days after the Fault report is logged by Telstra +> # ^ * + > Where the CRD or RCRD is longer than the Service Level, then the CRD or RCRD will be the Service Level (or Telstra commitment Date). d from the date Telstra enters the order into the relevant provisioning system to the last date recorded against the following states (where applicable) through which can order can pass: (A) Plant assignment; (B) Exchange building activation. Does not apply where any field work or exchange work required to fulfil the activation is not part of a standard LSS activation order. d from the date and time the Fault call was logged by Telstra (in Telstra s information technology systems) to the date and time the technician records that the Fault is repaired. If the call date and time is after 5pm, the baseline for calculating the Service Level moves to 9am the next Working Day. Does not apply where a site visit to the customer s premises is required to determine whether a Fault is the cause of the service difficulty. Table 3.4: Unconditioned Local Loop Service - Equivalence and Transparency Metric Metric Service Level (where applicable) 14. The perecentage of ULL Individual Cutovers completed on the Customer Request Date 15. The percentage of appointments for ULL Individual Cutovers offered according to the Service Level where there is an Intact metallic path at the relevant premises 16. The percentage of Faults rectified within the Service Level 95% #^ For Band 1 and 2 exchanges only, if the Wholesale Customer requests, Telstra will offer an appointment that occurs 3 Clear Working Days after the date the request for the ULL Individual cutover is received. If the Customer Requested Date is greater than 3 Clear Working Days, that date becomes the applicable Service Level^ Band 1 and 2 by the end of the first Clear Working Day after the Fault report is logged by Telstra *+ Band 3 by the end of 2 Clear Working Days after the Fault report is logged by Telstra *+ Band 4 by the end of 3 Clear Working Days after the Fault report is logged by Telstra *+ # ^ * + Metric does not apply where any field work or exchange work required to fulfil the activation is not part of a standard ULLS activation order. d based on the Customer Requested Dates recorded in the relevant Telstra systems. d from the date and time the Fault call was logged by Telstra (in Telstra s information technology systems) to the date and time the technician reports that the Fault is repaired. If the call date and time is after 5pm, the baseline for calculating the Service Level moves to 9am the next Working Day. Metric does not apply where a site visit to the customer s premises is required to determine whether a Fault is the cause of the service difficulty. FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 10/18

Table 3.5: Domestic Transmission Capacity Service - Equivalence and Transparency Metrics Metric Service Level (where applicable) 17. The perecentage of Domestic Transmission Capacity Service orders provisioned on or by the Service Level Category 1 Order: Metro 9 Clear Working Days #^ Country 19 Clear Working Days #^ Category 2 Order: Metro 19 Clear Working Days #^ Country 39 Clear Working Days #^ Category 3 Order: Metro only 24 Clear Working Days #^ 18. The percentage of Faults rectified within Service Level Urban + 1 Clear Working Day Rural + 2 Clear Working Days Remote + 3 Clear Working Days,. of the Fault report being logged by Telstra * # ^ * + d from the date that Telstra received a correct and valid application from the customer to the date recorded in Telstra s IT systems that identifies the date when all of the relevant stages through which the order can pass are completed. Where the CRD or RCRD is longer than the Service Level, then the CRD or RCRD will be the Service Level (or Telstra commitment date). d from the call date and time which is the date and time the Fault call is logged by Telstra (in Telstra s IT Systems) to the earlier of: (A) the date and time that the tester enters an actual restore against the order; or (B) the date and time the field technician enters as the restore time. If the call date and time is after 5pm, the baseline for calculating the service Level moves to 9am the next Working Day. Refers to the location of the Fault, and not the location of the terminating points of the service. Table 3.6: Billing Timeliness - Equivalence and Transparency Metric Metric Service Level (where applicable) 19. Billing Timeliness Current charges generated in Telstra s system presented on bill Wholesale charges not older than 95 days Retail charges not older than 190 days Table 3.7: Access to Telstra Exchange Building Facilities - Equivalence and Transparency Metrics Metric Service Level (where applicable) 20. The percentage of Joint Completion Inspections (JCIs) completed on the Telstra Committed Date (TCD) 90% Table 3.8: Wholesale systems availability - Equivalence and Transparency Metrics Metric Service Level (where applicable) 21. Availability of LOLO 98% FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 11/18

Further information in relation to the metrics, including relevant definitions, is provided in the SSU. A copy of the SSU is available at http://www.telstrawholesale.com.au/about/structural-separationundertaking/index.htm#tab-2. 3.2. Approach to calculating results Clause 10 of Schedule 3 of the SSU provides that, when calculating its performance in relation to each metric, Telstra is not required to take into account: for metrics 1-16 and 20-21, a ticket of work which is directly affected by NBN-related activities being undertaken by NBN Co or Telstra in any Rollout Region or which is in the course of being migrated to the NBN at any time during the quarter; a failure to meet a Service Level which is caused by activities undertaken by Telstra in order to comply with the Migration Plan; a failure to meet a Service Level due to circumstances outside of Telstra s control; a failure to meet a Service Level due to the need for Telstra to redeploy staff or equipment from one or more areas to another area that has been affected by circumstances outside of Telstra s control, such as an area that has been affected by a natural disaster; circumstances where the Retail Customer or end-user of a Wholesale Customer causes delay or fails to keep an appointment with Telstra without giving at least 24 hours notice; a failure to meet a Service Level which the Retail Customer or Wholesale Customer has waived in writing; or any temporary planned outage or withdrawal of services necessary in order to maintain or upgrade a facility, service or network, where Telstra has given reasonable notice to the Retail Customer or Wholesale Customer of the outage or withdrawal. For the June 2012 quarter the only Condition that Telstra has applied to the relates relates to Mass Service Disruptions. FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 12/18

4. Results for the June 2012 quarter Under the new reporting framework in the SSU, Telstra is required to prepare and provide to the ACCC and ITA Adjudicator an Operational Equivalence Report setting out the results for each metric in the SSU. There is no requirement in the SSU that the Operational Equivalence Report include an explanation of any variance in the results for those metrics. Rather, the SSU envisages that this information will be provided in a separate report. Clause 16.3 of the SSU provides that, if the results for a metric demonstrate a Reporting Variance (defined as a variance of 2% or more (in negative terms) between, in the case of metrics 1-11 and 17-19, performance levels for Wholesale Customers and Retail Business Units or, in the case of metrics 12-16 and 20-21, Telstra s actual performance and the specified service target), Telstra is required to provide the ACCC and ITA Adjudicator with a separate confidential report setting out the reason(s) for the variance and, if Telstra determines that the variance is due to any non-compliance with the IET measures in Part D of the SSU, the steps being taken to investigate and rectify the non-compliance. Although there is no requirement to provide variance explanations in the public report, Telstra will provide a summary variance explanation in instances where Retail performance exceeded Wholesale performance by more than the 2% tolerance limit or where Wholesale performance has not met the specified performance targets for those metrics which are not calculated in reference to the Retail performance. Additional detail will be provided in the separate, confidential report prepared for the ACCC and the ITA Adjudicator under clause 16.3 of the SSU. Note: The measurement of Telstra s performance and whether variance explanations are required is determined by considering the performance results with the Schedule 3, Clause 10 Conditions applied, in accordance with clause 16.2(d). The tables in this section set out the results for the June 2012 quarter. Note that a positive outcome means Telstra s performance for Wholesale Customers was greater than its performance for Retail Customers. Telstra s performance as detailed in this Report is based on the information available at the date the report is prepared. Telstra reserves the right to provide any correction to this Report, should it later discover an error or other methodological issue with the calculation of the results. Unless explicitly stated, nothing in this Report is to be taken as any legal admission by Telstra that any of the circumstances described amount to a breach of any obligation under the SSU. Table 4.1: Results for Basic Telephone Service Business Customers Residential Customers Metric 1 The percentage of Basic Telephone Service customer installation orders provisioned in the relevant Quarter on or by the Service Level previous service available for automatic connection (i.e. an In-place Connection) Metric 2 The percentage of Basic Telephone 6.04% 6.04% 4.74% 4.74% 8.80% 10.54% 6.92% 8.91% FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 13/18

Service customer installation orders provisioned in the relevant Quarter on or by the Service Level new service with available cabling and capacity where pre-provisioning work is not required Business Customers Residential Customers Metric 3 The percentage of Basic Telephone Service orders provisioned in the relevant Quarter, on or by the Service Level new service which requires additional cable or network capacity Metric 4 The percentage of Basic Telephone Service order appointments that are met in the relevant Quarter 13.51% 15.30% 15.28% 16.24% 0.90% 0.90% 2.62% 2.62% Metric 5 The percentage of Basic Telephone Service Faults that are rectified in the relevant Quarter, and copied to Telstra s data warehouse by the relevant data extraction date, on or by the Service Level -5.89% -9.00% -4.36% -6.65% The Business and Residential variance is due to high workloads caused by inclement weather. The high workloads resulted in rescheduling of a number of faults requiring rectification. A higher proportion of rescheduled Wholesale faults missed target. Telstra is currently assessing volumes and associated resourcing in order to address high workload situations. Note: Explanation relates to performance results with the Conditions applied. Metric 6 The percentage of Basic Telephone Service Fault appointments that are met in the relevant Quarter Metric 7 The percentage difference in nonrecurring Fault ratio -0.45% -0.45% 0.15% 0.15% 0.07% 0.07% -0.89% -0.89% Table 4.2: Results for Wholesale ADSL Layer 2 Service Business Customers Residential Customers Metric 8 The percentage of services provisioned within Service Level where the customer or end-user has an existing 0.82% 1.10% 0.61% 0.86% FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 14/18

and functioning basic telephone service capable of supporting ADSL services Business Customers Residential Customers Metric 9 The percentage of services provisioned within Service Level held orders Metric 10 The percentage of Faults rectified within Service Level Metric 11 The percentage of appointments kept -4.84% -6.45% -0.44% -1.06% The Business variance is due to the small number of held orders which makes this metric volatile. Wholesale missed target with 3 orders. This is a statistically insignificant result. Note: Explanation relates to performance results with the Conditions applied. 1.37% 1.95% 0.38% 0.23% -0.40% -0.40% 0.03% 0.03% Table 4.3: Results for Line Sharing Service Business Customers and service target Residential customers and service target 10, Metric 12 The perecentage of LSS completed within Service Level 9.02% 8.77% 9.22% 8.66% and service target conditions in Cl 10, and service targets conditions in Cl 10, Metric 13 The percentage of Faults rectified within Service Level 1.77% -2.30% Table 4.4: Results for Unconditioned Local Loop Service and service target conditions in Cl 10, and service targets conditions in Cl 10, FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 15/18

and service target conditions in Cl 10, and service targets conditions in Cl 10, Metric 14 The perecentage of ULL Individual Cutovers completed on the Customer Request Date Metric 15 The percentage of appointments for ULL Individual Cutovers offered according to the Service Level where there is an Intact metallic path at the relevant premises Metric 16 The percentage of Faults rectified within the Service Level -1.77% -6.33% 2.98% 2.92% -14.32% -31.26% The variance is due to high workloads caused by inclement weather. The high workloads resulted in rescheduling of a number of faults requiring rectification. A proportion of rescheduled faults missed target. Performance against this metric is being reviewed in conjunction with Metric 5. The course of action that Telstra will initiate is intended to address this metric as well. Note: Explanation relates to performance results with the Conditions applied. Table 4.5: Results for Domestic Transmission Capacity Service conditions in Cl 10, Sch 3, SSU conditions in Cl 10, Metric 17 The perecentage of Domestic Transmission Capacity Service orders provisioned on or by the Service Level Metric 18 The percentage of Faults rectified within Service Level -5.14% -5.14% The variance is due to the small number of Retail orders. Wholesale orders represent 95% of the total orders. This is a statistically insignificant result. Note: Explanation relates to performance results with the Conditions applied. -0.84% 0.00% Table 4.6: Results for Billing Timeliness conditions in Cl 10, Sch 3, SSU (not applicable) conditions in Cl 10, Metric 19 Billing Timeliness Current charges generated in Telstra s system presented on bill 0.47% n/a FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 16/18

Table 4.7: Results for access to Telstra Exchange Building Facilities and service target conditions in Cl 10, (not applicable) and service targets conditions in Cl 10, Metric 20 The percentage of Joint Completion Inspections (JCIs) completed on the Telstra Committed Date (TCD) 100% n/a Table 4.8: Results for wholesale systems availability and service target conditions in Cl 10, (not applicable) and service targets conditions in Cl 10, Metric 21 Availability of LOLO 99% n/a FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 17/18

Glossary and Acronyms ACCC ADSL CRD IET IT LOLO LSS NBN RCRD SSU ULLS Australian Competition and Consumer Commission Asynchronous Digital Subscriber Line Customer Required Date Interim Equivalence and Transparency Information Technology LinxOnline Ordering Line Sharing Service National Broadband Network Revised Customer Required Date Structural Separation Undertaking Unconditional Local Loop Service FINAL TELSTRA UNRESTRICTED OPERATIONAL EQUIVALENCE REPORT PAGE 18/18